The Brazilian Federal Supreme Court¹ (STF) has recognized general repercussion in RE 1425640 (Theme 1401), concerning the constitutionality of the 30% limitation on the compensation of tax losses from Corporate Income Tax² (IRPJ) and the negative base for Social Contribution on Net Profit³ (CSLL) in cases of business termination. The discussion centers on whether companies that cease their activities can fully utilize accumulated losses to reduce tax payments at the time of liquidation, bypassing the annual limit currently stipulated in legislation.
This issue gains prominence because, in 2019, during the judgment of Theme 117, the STF deemed the 30% limitation valid for operational companies when ruling on Extraordinary Appeal No. 591.340. Now, the Court will assess whether this same restriction can be applied to the definitive termination of the legal entity, where future exercises for gradual fiscal loss recovery do not exist.
It is noteworthy that, during the General Repercussion analysis on May 31, 2025, in a virtual plenary session, the rapporteur, Justice André Mendonça, emphasized that the matter involves critical scenarios of the national economy and deserves evaluation from the perspective of reasonableness in imposing tax burdens during business closure processes.
With the acknowledgment of general repercussion, the decision to be made by the Supreme Court will have binding effects on the entire judiciary and the Administrative Council of Tax Appeals⁴ (CARF). Thus, although the case has no forecasted date for judgment, the discussion promises to significantly impact businesses, creating a scenario of attention and expectation from taxpayers, mainly regarding the management of fiscal liabilities.
The Tax Law team at Loeser e Hadad Advogados is available to provide further information and clarifications on this matter.
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25 de June de 2025
